Banks After the independence, banking industry in Bangladesh started its journey with 6 Nationalized commercialized banks, 3 State owned Specialized banks and 9 Foreign Banks. In the 1980's banking industry achieved significant expansion with the entrance of private banks. Now, banks in Bangladesh are primarily of two types:

• Scheduled Banks:
The banks that remain in the list of banks maintained under the Bangladesh Bank Order, 1972.
• Non-Scheduled Banks:
The banks which are established for special and definite objective and operate under any act but are not Scheduled Banks. These banks cannot perform all functions of scheduled banks.

There are 62 scheduled banks in Bangladesh who operate under full control and supervision of Bangladesh Bank which is empowered to do so through Bangladesh Bank Order, 1972 and Bank Company Act, 1991. Scheduled Banks are classified into following types:

1. State Owned Commercial Banks (SOCBs): There are 6 SOCBs which are fully or majorly owned by the Government of Bangladesh.
2. Specialized Banks (SDBs): 3 specialized banks are now operating which were established for specific objectives like agricultural or industrial development. These banks are also fully or majorly owned by the Government of Bangladesh.
3. Private Commercial Banks (PCBs): There are 43 private commercial banks which are majorly owned by individuals/the private entities. PCBs can be categorized into two groups:
   1. Conventional PCBs: 33 conventional PCBs are now operating in the industry. They perform the banking functions in conventional fashion i.e interest based operations.
   2. Islami Shariah based PCBs: There are 10 Islami Shariah based PCBs in Bangladesh and they execute banking activities according to Islami Shariah based principles i.e. Profit-Loss Sharing (PLS) mode.
4. Digital Commercial Banks: There is 1 digital commercial bank which is owned by individuals/private entities. It is a digital bank with no branches.
5. Foreign Commercial Banks (FCBs): 9 FCBs are operating in Bangladesh as the branches of the banks which are incorporated in abroad.

There are now 5 non-scheduled banks in Bangladesh which are:

1. Ansar VDP Unnayan Bank,
2. Karmashangosthan Bank,
3. Grameen Bank,
4. Jubilee Bank,
5. Palli Sanchay Bank

FCs
Finance Companies (FCs) are those types of financial institutions which are licensed under the ফাইন্যান্স কোম্পানী আইন, ২০২৩ (the Finance Company Act, 2023) and regulated and supervised by the Bangladesh Bank. At present, 35 FCs are operating in Bangladesh while the first one was established in 1981. Out of the total, 2 is fully government owned, 1 is subsidiary of a state-owned commercial bank, 2 are jointly owned by the government and foreign government entities, 19 are established by private domestic entrepreneurs and 11 are joint ventures of domestic and foreign entrepreneurs. Major sources of funds of FCs are Term Deposits (at least three months tenure), Credit Facility from Banks and other FCs, Call Money as well as Bond and Securitization.

The major difference between banks and FCs are as follows:

1. FCs cannot issue cheques, pay-orders or demand drafts.
2. FCs cannot receive demand deposits,
3. FCs cannot be involved in foreign exchange financing,

FCs can conduct their business operations with diversified financing modes like syndicated financing, bridge financing, lease financing, securitized instruments, private placement of debt and equity etc.